Correlation Between Franklin Pennsylvania and Oppenheimer Roc
Can any of the company-specific risk be diversified away by investing in both Franklin Pennsylvania and Oppenheimer Roc at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Franklin Pennsylvania and Oppenheimer Roc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Pennsylvania Tax Free and Oppenheimer Roc Penn, you can compare the effects of market volatilities on Franklin Pennsylvania and Oppenheimer Roc and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Franklin Pennsylvania with a short position of Oppenheimer Roc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Pennsylvania and Oppenheimer Roc.
Diversification Opportunities for Franklin Pennsylvania and Oppenheimer Roc
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Oppenheimer is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Pennsylvania Tax Free and Oppenheimer Roc Penn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Roc Penn and Franklin Pennsylvania is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Franklin Pennsylvania Tax Free are associated (or correlated) with Oppenheimer Roc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Roc Penn has no effect on the direction of Franklin Pennsylvania i.e., Franklin Pennsylvania and Oppenheimer Roc go up and down completely randomly.
Pair Corralation between Franklin Pennsylvania and Oppenheimer Roc
Assuming the 90 days horizon Franklin Pennsylvania Tax Free is expected to generate 1.02 times more return on investment than Oppenheimer Roc. However, Franklin Pennsylvania is 1.02 times more volatile than Oppenheimer Roc Penn. It trades about 0.14 of its potential returns per unit of risk. Oppenheimer Roc Penn is currently generating about 0.13 per unit of risk. If you would invest 860.00 in Franklin Pennsylvania Tax Free on September 1, 2024 and sell it today you would earn a total of 39.00 from holding Franklin Pennsylvania Tax Free or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Pennsylvania Tax Free vs. Oppenheimer Roc Penn
Performance |
| Timeline |
| Franklin Pennsylvania |
| Oppenheimer Roc Penn |
Franklin Pennsylvania and Oppenheimer Roc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Pennsylvania and Oppenheimer Roc
The main advantage of trading using opposite Franklin Pennsylvania and Oppenheimer Roc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Pennsylvania position performs unexpectedly, Oppenheimer Roc can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Oppenheimer Roc will offset losses from the drop in Oppenheimer Roc's long position.| Franklin Pennsylvania vs. Pace Municipal Fixed | Franklin Pennsylvania vs. Nuveen Arizona Municipal | Franklin Pennsylvania vs. Ab Impact Municipal | Franklin Pennsylvania vs. Ishares Municipal Bond |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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